Are You Only Focusing On Price? Don’t Overlook These Other Things When You’re Buying A Resale Flat

Coming to an agreement on the price of your new resale flat is definitely important, but there are more things that are as important as the price. 

In this high-interest climate, buying a house can sure be stressful. Aside from the soaring property prices that are definitely going to burn a (huge) hole in your wallet, you’ll also have to deal with the increasing mortgage rates that are infamously high.

Haggling for your ideal price might be your top priority, but there are other concessions to negotiate on in order to make the deal even more value for money, or just help to push the deal through.

Think the only thing to negotiate for a new house is the price? Here are some other factors that home buyers may overlook that are equally as important as the agreed price, that can offset the cost of your new home.

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With rising interest rates, getting the best home loan package became even more important. Compare the best home loan rates with Singsaver.

1. Existing furnishings

If you think the only way to save on your new resale home is to cut down on the purchase price, you’re missing something else. 

It is no secret that furniture and appliances can cost you an arm and a leg — a sofa can already cost upward of S$600, while aircon units can cost about S$1,000. Add all these up, and you will realise that they can cost a fortune.

If the seller doesn’t want to settle on a lower price for you, you could always ask if they are willing to throw some furniture and appliances into the deal. Sometimes, the seller would be more than willing to do that for you as these existing furniture and appliances could cost them a sum of money if they had to pay for temporary storage.

Even if it's just a washing machine or a dining table, it could easily save you a few hundred — that is if you’re not particular about second-hand furniture or aren’t the kind that is bent on brand new furnishes. But of course, make sure it’s in good condition! If not it’ll be a headache having to throw such bulky white goods after a few weeks.

See also: Here's How to Affordably Furnish Your House

2. Vacant possession date

Time is money. And that also includes the vacant possession date of your new resale home. 

Being able to move in earlier is always better because it could mean saving up on pricey temporary accommodations for a few months. According to propertyguru, the rental for a 3-room HDB flat could cost anywhere from S$2,000 to S$2,700 a month, based on the figures from Q32022. Imagine having to rent a home for 3 months. That easily sets you back by about S$6,000 at least!

Being able to negotiate on an earlier vacant possession date could benefit you tremendously. If the seller doesn’t want to come down to your ideal asking price, you could counteroffer and request for them to hand over the house to you earlier as an alternative compensation.

Conversely, if you’re in no hurry to move in and the seller seems like he could do with a few extra months in his current home, you could then use this to your advantage and request a lower asking price or a rental agreement to “rent” your new home. This could potentially tip the deal in your favour if the seller prioritises staying in their home for a longer period of time in exchange for a lower price.

3. Transaction timeline

The transaction timeline is just as important as when you can move in. And this could be in your favour.

Especially for sellers, the speed at which the deal pulls through matters as they usually have to meet the six-month Additional Buyers Stam Duty (ABSD) guidelines. HDB regulates all homeowners to buy another HDB flat and sell their existing one within the six-month window so they don’t incur the ABSD which taxes homeowners who own two HDB flats.

As such, sellers might have to close the deal quickly to meet the deadlines, and also if they are in a rush to purchase another home that they’ve been eyeing.

This could work to your advantage if you decide to make a fast deal, with some sellers prioritising buyers who are quick and decisive. At times, they might also be willing to lower the asking price or pay higher commissions for fast deals.

If you’re a buyer who is certain of the house, you can declare that you are ready to transact immediately, instead of waiting around hoping that the buyer would lower the price. Showing the buyer your Approval In Principle (AIP) from a mortgage broker will also reinstate your genuine interest in the place, giving the buyer confidence that you are a serious buyer.

Besides, having a faster transaction timeline is also favourable for you as the stress of searching for a home and negotiating can be quite draining at times, especially if you’re DIY without an agent.

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4. Additional repair works

Did you know that you could specify that you want the seller to get some of their pipings or walls repaired as part of the condition of sale? 

At times when you view a house, you might realise that the home is not in the best condition. A pipe might be leaking, a wall might be mouldy, and their doors are not working properly. Even if you request for maintenance works to be done, they might encourage you to purchase the flat “as is”, in its current state, alongside a small discount.

Both deals have their own pros and cons. If you’re looking for a home to move in asap, you might prioritise a home where it is functional and in good condition so you can spend less time on renovation work. However, if you’re in no hurry too, the added discount might benefit you if you can find a contractor who is able to do all these repairs at an affordable price.

It all boils down to your needs and priorities. It’s also advisable to get a rough quotation on the relevant repair works before you agree to purchase the flat “as is”. Sometimes, the repair work might cost way more than the discounted price, making the deal unfavourable to you.

With rising interest rates, getting the best home loan package became even more important. Compare the best home loan rates with Singsaver.

Tips on negotiating for the best price on your new resale flat

#1 Do market research

You’ve probably heard this a hundred times, but I’m just going to say it again. Doing market research is extremely important. Don’t go into the negotiating phase with zero knowledge of how much the unit is worth and whether or not the seller is trying to highball you.

As the buyer, setting the stage is important. Set a figure too high and you’ll be receiving the shorter end of the stick, and set a figure too low and the seller might just not want to negotiate with you at all.

Though it is time-consuming, you’ll need to have a gauge of just how much the other surrounding units are selling for, and the historical transactions of your unit. This helps you get a clearer idea of the minimum and maximum offer, so you’ll be able to come up with a reasonable asking price for both you and the seller.

#2 Know the flat inside out

Knowing the past transactions is simply not enough. You’ll also need to get an in-depth understanding of the unit in question. Does the unit get harsh afternoon sun? Is the unit too noisy even at night? Is there a nearby MRT station? Is this a corner unit? Does it have a premium facing?

Some of these features might also come with a premium because of how highly sought-after it is. Conversely, you should also take note of some of the unit’s flaws in order to back up your asking price if the seller finds it too low.

Knowing your unit inside out gives you a clearer picture of what you’re getting yourself into, and whether or not these features could justify your asking price. This also influences the valuation that you’ll be getting from the bank after agreeing on a price, so you can roughly sus out the value of the flat beforehand.

More on this topic:
How to Negotiate HDB Resale Price
7 Effective Steps to Negotiate Rent in Singapore
How To Minimise Cash Over Valuation (COV)
How to Buy an HDB Resale Flat Without an Agent
How To Sell Your HDB & Save On Property Agent Commission

#3 Understand the seller’s motivation to sell

A key to negotiating is to also get into the seller’s (enemy’s) head. How serious or how urgent are they in selling their flat?

Are they urgently trying to sell off their house to meet the six-month ABSD remission deadline? Or are they simply testing the waters by having their resale flat up for sale just to get a rough feel of the demand?

Knowing the seller’s motivations and current situation gives you an idea of just how much you can negotiate. If they are on a time crunch, this could give you the upper hand as they would most likely be willing to shave off the asking price a little for a quick deal. Conversely, homeowners who fall in the other camp might want to wait it out for the right offer to come.

#4 Keep to your budget

Always keep a budget in mind and stick to it. Even if you find the perfect house with the ideal aesthetic but the price is way out of your budget, it’s okay to take a step back and let it go.

More often than not, homebuyers might get caught up in their emotions thinking that they found the perfect home. One that’s a high floor, near the MRT station and requires little to no renovation. However, once they seal the deal at a price way above their budget, mortgage payments become an issue and result in them having to restrict their lifestyles.

Regardless of how great the unit seems to be, sticking to your budget is the most important. Keep on looking, maybe you’ll find an even better unit and a better deal.

With rising interest rates, getting the best home loan package became even more important. Compare the best home loan rates with Singsaver.

Read more:
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